financial crisis,  higher ed,  politics

How to dismantle a sector

I'm not an overtly political animal, unlike many of my colleagues, so maybe this post is misguided or misinformed, but increasingly working in Higher Ed in the UK feels like working in a beleagured sector. Many people will feel like this in the current crisis, so higher ed is no different in that respect, but it now feels like it is not only suffering the same fate as all sectors, but is actually the victim of an ongoing campaign. I sit in many meetings with colleagues, in this university and across the sector, where we end up shaking our heads and laughing with a mixture of amazement and hysteria at the next cumbersome plan that is being foisted upon us.

As I said, I'm not that political, so maybe I've got some of the following wrong, in which case, please correct me. But here is how I interpret the last few years, and some supposition about the next few:

  • The student loan scheme is forced through, and the coalition seems to have not considered the scenario that most universities will charge the top rate of £9000.
  • The scheme then turns out to be more costly to realise than the existing method.
  • In a panic, the government then introduces Student Number Control, so that it can cap the number of loans it gives out and can ringfence that money.
  • As I understand it, the situation with part-time students is too complex at the moment (when is a student studying, or in-between studies, what counts as a full time equivalent, etc), so they have avoided student number control at the moment. But it will probably come in to play for 2014.
  • However, because it will look politically damaging to allow students to 'buy' their way on to courses, the student control figure will apply, regardless of whether the students are taking out loans or not. Universities could then find themselves in the position of turning away students who have the money to study and who they have the capacity to teach.
  • The student control numbers however, do not apply to new private universities because they want to grow that sector.

WonkHE has a lot more insightful stuff on student number control if you want to dig down into it.

And this is avoiding looking at the situation with research. The higher education sector in the UK was a widely respected, profitable and functioning system. It was by no means perfect and certainly wasn't efficient, but it worked. I appreciate it worked because it was funded to an extent by the UK taxpayer, but even in hard economic terms, this shift from Government debt to private debt doesn't hold up to scrutiny. Not all debt is equal – Government debt can be long term and at low interest rates. Private debt creates a liquidity trap in times of economic crisis, because individuals seek to reduce their debt and thus don't contribute to growth, thereby creating more debt. And a nation's debt is best measured by combining Government debt, financial institutional debt, and personal debt. Shifting it to individuals then doesn't reduce the overall debt, it just increases the damage it does to your economic outlook.

Socially it's a poor idea too, in times of crisis society undergoes a seismic shift – people lose jobs in one sector, but retrain, re-educate and create a new one. But if they can't afford to study (or are put off by the austerity rhetoric) then this shift doesn't take place, or is at least limited. 

This may sound like special pleading – "we should be immune from the winds that batter the economy because we have nice beards" – but it isn't. Like many people in the sector, I expected and accepted that higher education would go through a period of increased accountability and efficiency. We weren't prepared though for this sustained assault, combined with a dangerous level of incompetence. 

And all this when you want to shift to being a knowledge economy – strange times indeed.



  • Markmcguire

    Hi Martin and others
    As you say, “this shift from Government debt to private debt doesn’t hold up to scrutiny”. That seems to apply across the board. Reports from so many countries confirm the pattern. Recent news out of Spain, for example, is terrible. Shifting the debt burden from the public (collective) to the private (individual) is bad enough. Shifting the debt from the financial sector to the public sector (and then on to individuals) is even worse. Reducing the spending power and confidence of the very consumers who are expected to keep the machine rolling along does little more than buy some time. As we keep hearing, the fundamentals are not good. Universities should be the place where these issues are most constructively, productively and openly debated. However, when your own house is on fire, it is difficult to focus on global warming.
    Things are not (yet) quite as bad in New Zealand, where I teach. Our second of two semesters for the year started this week. I signed in a student from the UK who moved to NZ after completing two years of study there but can no longer afford the tuition. Fortunately, he has NZ residency and can pay domestic, rather than international, fees. It must be pretty bad if students are leaving the country to study elsewhere – even as far away as New Zealand!
    While I’m here, I’d like to thank you for your contribution to the #change11 course. I didn’t catch all of the synchronous sessions, but I did attend yours. I purchased a copy of “The Digital Scholar” (for my Kindle). I’ve dipped in but haven’t read it properly yet, but I will. I’m interested in the increasing practice of offering books online as free HTML files or PDF downloads as well as selling physical and digital “book” versions. In the digital environment, the content seems to be separating from the form(at) of the experience. People expect the former to be free, but they are happy to pay for the added value of the latter.
    All the best,
    Mark McGuire
    Twitter: mark_mcguire

  • mweller

    Hi Mark, yes absolutely that transfer of debt doesn’t decrease the overall debt, it just makes its impact more damaging, but there is a rhetoric of austerity that has taken hold now. Perhaps we’ll all come to NZ.
    Thanks for the comments on the book – yes, as an author I was never going to be rich from it, so i may as well give it away online and hopefully get a wider readership. Not that I’d object if it did make me rich of course.

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